IGI Inc (IG)

[BioSpecialist]

Roth starts IGI Labs at buy
August 7, 2013

Roth Capital Partners has initiated coverage of IGI Laboratories (NYSE MKT:IG) with a “buy” rating and 12-month price target of $3.50, saying the impetus for the rating is “expectations for the company’s internal proprietary generic pipeline to come to fruition and drive sustainable earnings profitability.”

Analyst Scott Henry writes that IGI Labs has 11 ANDAs at the FDA, and “we expect approvals starting in late 2013/early 2014. We view this pipeline as the engine for sustainable profitability in 2014-plus.”

In addition, he said IGI is currently launching two new products – Synalar and econazole nitrate – that could have combined annual peak revenue potential approaching $10-million. These compounds could take the company to earnings breakeven, he added.

“We believe that topicals are among the most attractive segments for an emerging generics company, with higher barriers to entry and better pricing,” he said. “We believe that this further makes IGI Labs a target for industry consolidation.”